Saturday, December 1, 2007

The General Trading Guidelines

Candlestick chartNext week I will begin to put my $20,000 into the stock market. I have let it be known that this type of trading will be a bit unusual for me as I'm not used to getting in and out of positions in a relatively short time frame. While I'm not going to follow any hard and fast rules, these are the general guidelines I plan to follow.

  • I'll have no more than four or five positions at a time.

  • I will stay in a position on average about a week or two but may hold on to some positions for a few months.

  • I will find stocks that I think have a strong fundamental story, but I will only be in stocks that have strong technical indicators to suggest a short term rise

  • I will short if I have to, but it will generally not be part of my game plan. Shorting can be very difficult and you can easily lose your shirt if you aren't careful.

Please do not try this at home :) I'm playing with real money, and things may get ugly. I'll give a week by week recap of how I've done and what my plan is going forward. Each stock that I pick, I'll give to the full reason why from both a fundamental reason and a technical reason. Sometimes, I may not have totally sound reasons, and I'll explain that too. Picking stocks can take a lot of time as can starting a new job, so it's going to be hard to try and balance everything out and still come out on top. Expect the first pick sometime in the middle of the week and we will go from there.


  1. That's great! I wish you all the luck! It'll be exciting to finally see you trading :)

  2. "Please do not try this at home"
    :P Pfft, ruin all my fun!
    Actually, I know very very little about the stock market. I'm hoping to learn a lot by watching your strategy.

  3. doe you ever watch Hugh Hendry? heard of him. well, this morning i got the $$ tip, i personally think he's right on; so 1) the spread on the 2 yr. and ten year is going to widen, put your money on it! 2) some $ pegged currencies will rocket as soon as the peg is removed, example, thailand, malaysia, dubai, katar 3) mining stocks are undervalued and the underlying (esp. gold, though maybe temporarily soft) will blast, gold has begun today, but will be way out there by the end of the year, buy on dips. success with your bouble journey, careful in the market, the DOW, etc. are in for a rocky ride. success, i'm on the road myself.

  4. definitely use some hard and fast rules:
    (i've reacted a bit too hasty in the previous blog, so now with a reread)
    1) 1 to 2 % money at risk (do the math)
    2) work with stop-loss
    3) check the MACD, RSI and OBV (move on concurring signals or stand aside)

    success, to all of you.

  5. hi, again, couldn't let it go, sorry;

    some info Hugh Hendry and Eclectica, success.

  6. Thanks for the ideas Ningpo. Markets didn't look too good for stocks, and I'm looking around for some other non-stock ideas.